HDFC-HDFC Bank Merger: Financial Heavyweight To Form, HDFC Twins Soar Up to 15%

By Malvika Gurung — In a major development on April 4, the board of directors of mortgage lender HDFC (NS:), at its meeting held on Monday, have approved the merger of the company with the country’s largest private lender HDFC Bank (NS:).

The housing finance company’s board has approved amalgamating its wholly-owned subsidiaries HDFC Investments Ltd and HDFC Holdings Ltd with HDFC Bank, and its shareholders and creditors.

As a result, shares of the HDFC twins, HDFC Ltd zoomed 15% to Rs 2,820 apiece and those of HDFC Bank surged 13.83% to 1,714.3 apiece at 10:15 am on Monday, ranking highest in the list of top gainers on the index, at the time of writing.

The merged entity is likely to create the third-largest entity in terms of market capitalization in the domestic market, currently held by HDFC Bank.

As per the share exchange ratio, for every 25 equity shares held of HDFC Ltd, 42 shares of HDFC Bank will be given.

Upon completion of the merger, the public shareholders will own a 100% stake in HDFC Bank, while the existing shareholders of HDFC will acquire a 41% stake in the private lender, cited news reports.

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The merger between the two heavyweights is likely to be completed by Q2 or Q3 of FY23. “This is a merger of equals,” stated the chairman of HDFC Ltd.

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